Friday, 24 March 2017

Capacity Market results announced today mean dozens of industrial and local businesses will help keep the lights on at peak demand next winter and cut carbon through innovation in the demand response sector, the Association for Decentralised Energy said.

Reducing Energy Loads

Approximately 312 MW of carbon free turn-down demand response has been secured as part of the Transitional Arrangements auction, which is aimed at preparing and supporting this innovative sector for the main Capacity Market auction.

The auction, which cleared at £45 per kW on Wednesday, means businesses across the UK will earn just over £14m in revenue, helping them to manage their energy costs and boost their competitiveness simply by turning down or shifting non-critical processes. Examples of demand turn down include temporarily switching off unnecessary lighting, pumps and motors, while demand shifting is the practice of moving a business process to earlier or later in the day.

There is nearly 10GW of untapped business led demand response, including highly efficient combined heat and power, ready to support the UK’s energy security. To achieve this potential however, user led demand response must be able to access all markets, from the Capacity Market and Balancing Mechanism to the Wholesale Market and ancillary services market, on an equal footing with traditional generation.

ADE Director Dr Tim Rotheray said:

"Today’s results are returning value to energy users for helping keep the lights on, while also cutting emissions through zero carbon demand response. Instead of paying power stations to increase supply, businesses will be managing demand in innovative ways while meeting all their energy needs leading to a more efficient, more affordable and lower carbon system.

"This auction is designed to help lower costs and improve uptake of demand response so that this tool will play a key part of the future energy sector. The Transitional Arrangements are vital in supporting this innovative sector to grow, deliver Britain’s security of supply needs and ultimately help drive a more competitive demand response market."

Notes to editors:

Auction results
A total of 373 MW entered the Auction, of which 83.69% received Capacity Agreements for delivery in 2017/18.